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Spinoffs

This spinoff will appeal to big investors

Following the 2018 school shooting in Parkland, Florida, some retailers stopped ordering Vista Outdoor’s products because of its ownership of an ammunitions manufacturer.

That’s partly why Vista is now spinning off this business as a separate firm....

2 min read

Pat McKeough

Spinoffs

Haleon sale funds new acquisition

PFIZER INC. $49 is a buy. The prescription drugmaker (New York symbol PFE; Manufacturing & Industry sector; Shares outstanding: 5.6 billion; Market cap: $274.4 billion; Dividend yield: 3.3%; Takeover Target Rating: Medium; www.pfizer.com) merged its consumer drug business with GlaxoSmithKline (New York symbol GSK) in 2019.

Glaxo now plans to spin off this business as a separate firm called Haleon; it owns 68% of this operation, with Pfizer holding the remaining 32%....

1 min read

Pat McKeough

Spinoffs

Corteva continues to impress us

New public companies usually start off slow, like Bausch + Lomb, but can go on, like Corteva, to post big gains. Even so, we recommend just one of the two for new buying.

CORTEVA INC. $56 is a buy. The company (New York symbol CTVA; Manufacturing sector; Shares outstanding: 723.7 million; Market cap: $40.5 billion; Dividend yield: 1.0%; Takeover Target Rating: Medium; www.corteva.com) makes seeds and crop-protection chemicals.

On June 1, 2019, DuPont de Nemours Inc....

2 min read

Pat McKeough

Spinoffs

Activists don’t make Wendy’s a buy

WENDY’S CO. $18 is a hold. The company (Nasdaq symbol WEN; Consumer sector; Shares outstanding: 214.3 million; Market cap: $3.9 billion; Dividend yield: 2.8%; Takeover Target Rating: Medium; www.wendys.com) is a leading quick-service restaurant chain with more than 7,000 locations worldwide....

1 min read

Pat McKeough

Spinoffs

Two things driving activists’ interest

Activists usually demand big changes at companies they feel are undervalued. Still, sometimes, they simply invest in a company because they like its existing prospects. Here are examples of both.

CANADIAN PACIFIC RAILWAY LTD. $89 is a buy. The company (Toronto symbol CP; Manufacturing & Industry sector; Shares outstanding: 929.9 million; Market cap: $82.8 billion; Dividend yield 0.9%; Takeover Target Rating: Medium; www.cpr.ca) transports freight over a 23,700-kilometre rail network in Canada as well as the U.S....

2 min read

Pat McKeough

Spinoffs

Keep holding these after their big gains

On April 1, 2020, the old Arconic Inc. split into two new companies: Howmet and Arconic Corp. As a result, each Arconic Inc. share automatically converted to one share of Howmet; shareholders also received one share of Arconic Corp. for every four shares of Arconic Inc....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Becton Dickinson & Co.

BECTON DICKINSON & CO. $237 is your #1 Spinoff Buy for 2022. The company (New York symbol BDX; Manufacturing sector; Shares outstanding: 285.1 million; Market cap: $67.6 billion; Dividend yield: 1.5%; Takeover Target Rating: Medium; www.bd.com) operates through three segments: Medical makes an array of devices for hospitals, doctors’ offices and other clients in health care; Life Sciences sells products for collecting and shipping specimens as well as equipment for detecting diseases; and Interventional makes stents, catheters, needles, incontinence devices, and surgical tools.

On April 1, 2022, Becton completed the spinoff of its Diabetes Care business (part of the Medical segment) as a separate, publicly traded firm called embecta Corp....

1 min read

Pat McKeough

Spinoffs

‘Pure-play’ spinoff benefits investors

A key reason for corporate spinoffs is they create companies that focus on a single business. Investors prefer these “pure-play” firms as they are easier to evaluate as potential takeover targets.

A good example is the former Fortune Brands holding company, which spun off Fortune Brands Home & Security in October 2011....

3 min read

Pat McKeough

How To Invest

Q: I really enjoy your Inner Circle emails. I was hoping to get your opinion on Sterling Check. Thanks!

A: Sterling Check Corp., $15.15, symbol STER on Nasdaq (Shares outstanding: 96.3 million; Market cap: $1.5 billion; www.sterlingcheck.com), provides tech-enabled, cloud-based background and identity checks on potential employees on behalf of hiring companies....

2 min read

Pat McKeough

How To Invest

Q: Pat, can I get your assessment of Autodesk as a stock to buy? Thanks.

A: Autodesk Inc., $172,60, symbol ADSK on Nasdaq (Shares outstanding: 217.3 million; Market cap: $37.6 billion; www.autodesk.com), is a leader in 3D design, engineering and entertainment software....

2 min read

Pat McKeough

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.